Carlitos couldn't have killed Lalin. Even if he wanted to!
"Spoilers ahead"
If he'd allowed Pachanga to execute Lalin, right then and there. After finding out he was an informant for the DA. When the authorities eventually discover his body. The DA would obviously know who was the man responsible and would likely try to connect him to the murder. Would they have been able to successfully prove it in court is another matter. But is that really a chance Carlitos was willing to take!? Considering he was trying to step away from a life of crime.